United States' Motion to Exclude Expert Testimony of Plaintiffs'

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One concern is that the results were "too good to be true" and, therefore, theBoyle logic of reasonable reliance on tax advice does not apply. The claim would be thatthe tax losses exceeded the cash contributions to the transaction and, therefore, thetaxpayers should have known that the claimed losses were not legitimate. It is entirelystandard, however, that tax losses exceed cash contnbutions. Basic Supreme Court taxprecedents support such losses. See Crane v. Commissioner, 331 U.S. 1 (1947);Commissioner v. Tufts, 460 U.S. 300 (1983).Tax experts argue all the time about when these results are appropriate andwhen they are not, and there are no firm conclusions. I have seen transactions wherethe highest-level tax practitioners vehemently argue over whether they wil be upheld,which each side strongly believing the other is wrong. Even a sophisticated taxpayercould not be expected to know when deductions in excess of cash are appropriate andwhen they are not as long as the deductions arise as part of an ordinary businesstransaction.Therefore, the circumstances surrounding the Opinion indicate that it wasreasonable for the taxpayers to rely on the Opinion. In particular, the Opinion wasgiven to the taxpayers by their trusted advisors rather than a promoter, the Opinionboth met, and would be seen by non-experts to have met, the norrnal standards foropinions in complex transactions, the transaction arose as part of normal business dealwith a substantial non-tax business purpose, and the transaction had a reasonableopportunity for profit after taking into account all expenses. Under these facts, relianceon the Opinion was, in my view, reasonable.Respectfully Submitted,Datedl -~,)_ ,vii -t¿.!)" /2 I 6'Ç.~-David A. Weisbach May 2, 200815
APPENDIX - DOCUMENTS REVIEWEDDescriptionMatthew R. Coscia letter to D. Andrew Beal (12/31/2001)Coscia Greilch & Company LLP, Investments in Foreign CurrencySwaps Tax Opinion December 2001Digital Swap Transaction confirmation ref. 403470/0DET53591(9/24/2001)Digital Swap Transaction confirmation ref. 403475/0DET53591(9/24/2001 )Digital Swap Transaction confirmation ref. 404143/0DET53593Digital Swap Transaction confirmation ref. 404144/0DET53593BFC Capital, Inc. - Overview and Investment Proposal for Solution6 Holdings, Ltd.Significant Payment CalculationE-mail from Craig Brubaker to Matthew Coscia (11/16/2001), withhandwritten notesSwap analysesOANDA.com foreign exchange historyAustralian Standard Transfer FormAustralian Standard Transfer FormFedEx WaybilThomas A. Montgomery letter to Todd Clendenning (9/26/2001)Beal Financial Corporation Directors Consent (9/13/2001)Deutsche Bane Alex Brown Account Agreement - BM Investments,LLCDeutsch Bane Alex Brown Non-Corporate Resolution (9/25/2001)& Retail New Account FormAlex Brown & Sons, Retail New Account InformationDeutsche Bane Alex Brown Account Agreement - BM Investments,LLCDeutsch Bane Alex Brown Non-Corporate Resolution (9/25/2001)& Retail New Account FormDeutsch Bane Alex Brown Non-Corporate Resolution (9/13/2001)& Retail New Account FormCertificate of Formation of BM Investments, L.L.c.Written Consent in lieu of Organizational Meeting of the SoleBates NumberBPBOOOO03-007BPBOOO013-147BPBOO0163-165BPBOOO166-168BPBOO0169-171BPBOO0172-174BPBOO0175-179BPBOOO180BPBOO0189-190BPBOO0191-194BPBOO0195-199BPBOO0200BPBOO0201BPBOO0202BPBOO0203BPBOO0204BPBOO0205-208BPBOO0209-210BPBOO0211BPBOO0212-215BPBOO0216-217BPBOO0218-219BPBOO0220BPBOO0221-22416
Page 1: UNITED STATES DISTRICT COURTEASTERN
Page 5 and 6: of the transactions in order to com
Page 7 and 8: Expert ReportOfDavid A. WeisbachUni
Page 9 and 10: c.v. is attached as Exhibit A. I am
Page 11 and 12: The background for the rules allowi
Page 13 and 14: which provide a general defense aga
Page 15 and 16: 2000-44 transaction. Without expres
Page 17 and 18: for the potential tender offer of S
Page 19 and 20: In particular, it is my understandi
Page 21: taxpayer wil prevail on the merits
Page 25 and 26: DAVID A. WEISBACHUniversity of Chic
Page 27 and 28: 143-151.Paretian Intergenerational
Page 29 and 30: APPENDIXList of Prior Expert Testim
Page 31 and 32: QUALIFICATIONSI am an Associate Pro
Page 33 and 34: dollar-US dollar exchange rate duri
Page 35 and 36: facili tate the pursuit of a tender
Page 37 and 38: Beal's and Montgomery's formation o
Page 39 and 40: "-"~-_._.~-,----_..__.._._.__._--_.
Page 41 and 42: LOAN PREMIUM VARIATIONThe loan prem
Page 43 and 44: premium variation, but the second a
Page 45 and 46: Beal and Thomas Montgomery stated t
Page 47 and 48: was planning to acquire. Sanding al
Page 49 and 50: irelationship cannot be eva~uated i
Page 51 and 52: To summarize, Notice 2000-44 descri
Page 53 and 54: IRS and Treasury sometimes refer to
Page 55 and 56: swaps in BPB (as opposed to within
Page 57 and 58: APPENDIX AETHAN YALECurriculum Vita
Page 59 and 60: ETHAN YALEVitae, Page 3PUBLICATIONS
Page 61 and 62: APPENDIX BDescriptionBa tes NumerMa
Page 63 and 64: IRS Information Release IR 2004-64,
Page 65 and 66: PURPOSE OF REPORTThis rebuttal repo
Page 67 and 68: (BM Investments LLC, was subsequent
Page 69 and 70: espect to a potential tender offer
Page 71 and 72: premises if the "transaction" refer
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e a payoff of at least $552.5 milli
Page 75 and 76:
WAS BEMONT FORMD FOR TAX REASONS? W
Page 77 and 78:
(Montgomery Deposition at 516:25-51
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his case (by showing that admitting
Page 81 and 82:
case. Another set of e-mail message
Page 83 and 84:
made in Australian dollars, for the
Page 85 and 86:
3. failure to treat the short finan
Page 87 and 88:
CONCLUSION OF REPORTThere are signi
Page 89 and 90:
DescriptionDeposition of Margaret M
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United States' Motion to Exclude Expert Testimony of Plaintiffs'

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